Cannes film festival: the road that led to Route Irish

Ken Loach's Route Irish is one of the films in competition for this year's Palme d'Or. His longtime collaborator and writer, Paul Laverty, reveals how their drama about security contractors in Iraq was born

We are all familiar with the ritual: solemn music, the national flag, escorts and salutes. As the body of a fallen soldier returns from foreign soil, words of consolation flow from politicians and generals to broken-hearted relatives.

It wasn't quite that way for Robert, an ex-paratrooper who was ambushed in Iraq. He was flown back from Kuwait and arrived at Glasgow airport. The undertaker told his sister Deely there were 10 bodies on the plane that day, two of which were unidentifiable. There was no fanfare, no union flag, no journalists and not one question. His death, as far as we know, wasn't added to any list.

The reason is simple. Robert was no longer a paratrooper, but a private contractor. Some call them private soldiers, or corporate warriors, or security consultants. Iraqis call them mercenaries.

The business of war is being privatised slowly and deliberately before our eyes. Award-winning journalist Patrick Cockburn, a well respected commentator on Iraq, estimated that there were around 160,000 foreign contractors in Iraq at the height of the occupation, many of whom, perhaps as many as 50,000, were heavily armed security personnel. The conduct of the war, and occupation afterwards, would have been impossible without their muscle. And thanks to Paul Bremer, the US-appointed head of the Coalition Provisional Authority, each and every one of those contractors was given immunity from Iraqi law. Order 17 was imposed on the new Iraqi parliament in 2003 and lasted until the beginning of 2009.

Nobody is interested in counting how many Iraqi civilians have been killed or injured by private contractors, but there is a vast body of evidence to suggest that there has been widespread abuse. Blackwater's massacre of 17 civilians in the middle of Baghdad was the most notorious incident, but there were many more that went unreported. One senior contractor told me, on condition of anonymity, that a South African contractor told him killing an Iraqi was just like "shooting a kaffir". Other bona fide contractors, proud of their professionalism, told me of their disgust at the violence of the "cowboys". If a contractor was involved in an incident which caused a fuss, they were whisked out of the country by their company. Impunity, by order.

While lowly contractors gambled with lives and limbs on Route Irish, the Baghdad airport road, the chief executives of their companies made fortunes. David Lesar, chief executive of Halliburton (one former CEO being Dick Cheney), earned just under $43m dollars in 2004. Gene Ray of Titan earned over $47m between 2004 and 2005. JP London of CACI earned $22m.

The devil is always in the detail. Private contractors charged the US army up to $100 to do a single soldier's laundry bag. At the other end of the scale, an official report dated January 2005 by the Special Inspector General for Iraq Reconstruction, Stuart Bowen, revealed that over $9bn dollars had disappeared in fraud and corruption, and that was only during a very limited period of the CPA.

As one contractor told me, the place "stank of money". Little wonder poorly paid army soldiers and elite special forces left in such numbers to join these private military corporations, as they saw their chance of a lifetime to "load up". But these men load up with more than cash. We are now used to seeing images of carnage and slaughter over there. We are accustomed to stories of abuse, torture and secret prisons. The Lancet's detailed estimate of 654,965 dead as at June 2006 is almost beyond the mind's capacity to grasp. It all seems now at a safe distance in time and place. Iraq fatigue, we are told, is upon us. But "over there" is on its way back home. Iraq is inside the heads of our boys.

I was stunned to learn from the charity Combat Stress, which deals with ex-soldiers suffering from post traumatic stress syndrome, that on average, it takes approximately 17 years for PTSS to manifest itself. They are bracing themselves (as is the US army) for a massive surge in the years to come. Norma, a gentle nurse on the point of retiring who had spent years with ex-soldiers, opened the way for the story of our film when she told me: "Many of these men are in mourning for their former selves." An ex-soldier showed me a painting he had drawn of himself: "I just want my old self back."

Order 17 may have been revoked in Iraq but its spirit still reigns supreme: the impunity, the lies, the contempt for international law, the undermining of the Geneva conventions, the secret prisons, the torture, the murder, the hundreds of thousands of dead. As I imagine the intellectual authors of the above – Bush, Blair, Rumsfeld and co – collecting their millions in after-dinner speeches and setting up their interfaith foundations, I cannot help but think of the nurses in Fallujah delivering babies born with two heads and deformed faces, thanks to the chemical bombs rained on that city. Our gift to the future.